. How much goodwill will Elf Hotels record on the acquisition?
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- On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for $19 per share. This acquisition gave Killearn a 40 percent ownership of Shaun and allowed Killearn to significantly influence the investee’s decisions. As of July 1, 2019, the investee had assets with a book value of $5 million and liabilities of $1,101,500. At the time, Shaun held equipment appraised at $280,000 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $650,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $640,000 in 2019, $670,600 in…On January 2, 2020, Sheffield Company acquired 90% of the outstanding common stock of Wildhorse Company for $459,000 cash. Just before the acquisition, the balance sheets of the two companies were as follows: Sheffield Wildhorse Cash $630,000 $180,000 Accounts Receivable (net) 405,000 74,000 Inventory 275,000 130,000 Plant and Equipment (net) 980,000 210,000 Land 205,000 88,000 Total Assets $2,495,000 $682,000 Accounts Payable $248,000 $144,000 Mortgage Payable 150,000 100,000 Common Stock, $2 par value 1,030,000 190,000 Other Contributed Capital 590,000 55,000 Retained Earnings 477,000 193,000 Total Equities $2,495,000 $682,000 The fair values of Wildhorse's assets and liabilities are equal to their book values with the exception of land. Cash Accounts Receivable Inventory Plant and Equipment Land. Total Assets Liabilities Accounts Payable Mortgage Payable Total Liabilities Stockholder's Equity Noncontrolling Interest Common Stock SHEFFIELD COMPANY AND SUBSIDIARY Consolidated Balance…Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,185,400 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 871,440 $871,440 Plant and equipment 1,025,090 1,437,590 Total $1,896,530 $2,309,030 Liabilities $194,060 $207,670 Common stock 484,800 Other contributed capital 632,900 Retained earnings 584,770 Total $1,896,530 As part of the negotiations, Pritano agreed to pay the stockholders of Succo $356,690 cash if the post-combination earnings of Pritano averaged $2,185,400 or more per year over the next two years. The estimated fair value of the contingent consideration was $143,480 on the date of the acquisition. (a) Prepare the journal entry on the books of Pritano to record the acquisition on December 31, 2013. (If no entry is required, select…
- On August 1, 2017, Riverbed Corporation acquired Marin, Inc. for a cash payment of $2.30 million. At the time of purchase, Marin’s balance sheet showed assets of $4,422,000, liabilities of $2,622,000, and owners’ equity of $1,800,000. The fair value of Marin’s identifiable assets is estimated to be $4,330,000.Compute the amount of goodwill acquired by Riverbed.Wombat Ltd has acquired all the shares of Emu Ltd. During 2020-2021, the following transactions have occurred: Wombat Ltd acquired a motor vehicle from an external vendor for $35,000 on 1 July 2020, 20% depreciation p.a., and sells it to its subsidiary, Emu Ltd, for $32,000 on the same day. Emu Ltd charges 25% depreciation p.a. on the vehicle. Prepare the consolidation worksheet entries at 30 June 2021 (current year). Prepare the consolidation worksheet entries at 30 June 2022 (next yearMoon Company is contemplating the acquisition of Yount, Inc., on January 1, 2015. If Moon acquires Yount, it will pay $730,000 in cash to Yount and acquisition costs of $20,000. The January 1, 2015, balance sheet of Yount, Inc., is anticipated to be as attached:Fair values agree with book values except for the inventory and the depreciable fixed assets, which have fair values of $70,000 and $400,000, respectively. Your projections of the combined operations for 2015 are as follows: Combined sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 Combined cost of goods sold, including Yount’s beginning inventory, at book value, which will be sold in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 Other expenses not including depreciation of Yount assets . . . . . . . . . . . . . . . . . . . . . . . . 25,000Depreciation on Yount fixed assets is…
- On January 2, 2019, ABC Co. acquired 80% of the outstanding common stock of Shade Co. for ₱1,344,000 with no goodwill resulting from the acquisition. The following selected account balances were taken from the accounting records of XYZ Co. Details shown doe XYZ Co. in the image. The building has an estimated useful life of 10 years and the equipment is expected to last for 5 years. For the year 2019, ABC Co. reported net income from own operations of ₱2,240,000 and XYZ Co. reported ₱600,000 net income from own operations. ABC Co. accounts its investment in XYZ Co. using the cost method. What is the consolidated income statement for the year 2019. NCI in the consolidated FS for the year 2019.On August 27, 2015, Celgene Corporation acquired all of the outstanding stock of Receptos, Inc., in exchange for $7.6 billion in cash. Referring to Celgene's 2015 financial statements and its July 14, 2015, press release announcing the acquisition, answer the following questions regarding the Receptos acquisition. Why did Celgene acquire Recentos?The DeBlois Family Co. acquired 40% of Orange Beach Co. with a $500,000 payment on January 1, 2023. The equivalent net book value (40% share) of Orange Beach on the date of acquisition was $425,000. $50,000 of the excess payment was attributable to equipment with a 10-year remaining life. The remainder of the excess payment was not attributable to any identifiable item. Orange Beach Co. Reported net income of $40,000 in 2023. No dividends were paid out. On January 1, 2024, DeBlois Family Co. Acquired an additional 50% ownership share in Orange Beach Co. With a cash payment of $700,000. The fair value of the noncontrolling interest was determined to be $140,000 on the date of acquisition. The total fair value of Orange Beach's identifiable assets and liabilities on January 1, 2024, was $1,000,000. The trading value of stock shares remained the same as acquisition date prices for several months after January 1, 2024. What amount should be reported as consolidated goodwill on January 1,…
- The following are several figures reported for Poyer and Sutter as of December 31, 2024: Sutter $ 250,000 700,000 Items Inventory Sales Investment income Cost of goods sold Operating expenses Poyer $ 450,000 900,000 450,000 205,000 350,000 275,000 Poyer acquired 90 percent of Sutter in January 2023. In allocating the newly acquired subsidiary's fair value at the acquisition date, Poyer noted that Sutter had developed a unpatented technology worth $68,000 that was unrecorded on its accounting records and had a five-year remaining life. Any remaining excess fair value over Sutter's book value was attributed to an indefinite-lived trademark. During 2024, Sutter sells inventory costing $125,000 to Poyer for $170,000. Of this amount, 15 percent remains unsold in Poyer's warehouse at year-end. Required: Determine balances for the following items that would appear on Poyer's consolidated financial statements for 2024: Note: Input all amounts as positive values. a. Inventory b. Sales c. Cost…On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $180,700 cash. Just before the acquisition, the balance sheets of the two companies were as follows: Prunce Sun Cash $282,130 $ 59,040 Accounts receivable (net) 142,020 24,810 Inventory 118,670 53,230 Plant and equipment (net) 395,640 92,960 Land 62,550 29,220 Total asset $1,001,010 $259,260 Accounts payable $106,440 $ 50,420 Mortgage payable 67,320 37,660 Common stock, $2 par value 421,400 76,960 Other contributed capital 217,440 21,970 Retained earnings 188,410 72,250 Total equities $1,001,010 $259,260 The fair values of Sun Company’s assets and liabilities are equal to their book values with the exception of land. (a) Your answer is correct. Prepare a journal entry to record the purchase of Sun Company’s common stock.…Razor Afternoon Co. owns 80% interest in Slice Morning Co. During 2019, Razor sold inventories costing ₱200,000 to Slice for ₱300,000. One-fourth of the inventories were unsold as of December 31, 2019 and were included in Slice’s year-end statement of financial position at the purchase price from Razor. The individual financial statements of Razor and Slice on December 31, 2019 show the following information: Razor Slice Inventory 1,260,000 380,000 Sales 6,700,000 2,700,000 Cost of sales (3,015,000) (1,755,000) Gross profit 3,685,000 945,000 There are no fair value adjustments arising from the business combination date. Write the Eliminating Entries for Periodic Inventory System.
